HEATWAVE

Heatwave and drought costing farmers €1,750 per week says financial advisory firm

Financial pinch for farmers as heatwave continues

Michelle Hogan

Reporter:

Michelle Hogan

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The accountancy and financial advisory firm IFAC has warned that the current heatwave sweeping the country is costing an average dairy farmer €250 per day or €1,750 per week.

Between the anticipated extra costs for feed because of poor grass growth and additional in parlour feed costs to maintain milk production, farmers are feeling the financial pinch.

IFAC teams around the country are working hard with farm families nationwide to ensure that they have fodder budgets in place and to help them anticipate the pressure that the current hot weather could put on their cash flow.

Billy Holland is the partner and head of the IFAC Portlaoise office.

“This current spell of hot weather will have a knock-on effect on the levels of fodder that a farmer can store for the winter so on farm planning needs to happen now to ensure that farmers can have access to and can afford to buy in additional feed stock.

"In what has already been an expensive year this heatwave is adding significant additional on farm costs. We estimate that the heatwave is costing about €1,750 a week for the average dairy farmer in additional costs.

“Farmers shouldn’t ignore the problem and should plan for financial pressures coming down the tracks. We're working with farmers to put cashflow budgets in place so that farmers are in a better position to meet all their financial commitments for the year. It’s the sensible thing to do.

“Banks hate surprises. We’re advising farmers to work with the banks now to let them know how they’re planning to manage the additional costs brought on by this heatwave and how they’re going to pay their bills over the winter. Always be honest and upfront with banks.  If you have a good thought out financial plan that conversation tends to be easier. Take the time and talk to your agri-advisor and your accountant," he said. 

IFAC has issued the following advice to farmers:

Get a fodder budget in place to cover additional costs for the winter (don’t be left short).
Manage your cashflow and make sure you have the cash resources to meet your financial commitments this year.
Talk to your bank. If you’re worried about how you’ll service your debt over the winter, talk to them early. The last minute never works.
Talk to your agri-advisor or account to make sure that your financial planning is accurate.

In the latest farming commentary from Met Eireann, drought conditions look set to continue. 

it has been completely dry across the country this past week except for the far north of Ulster where a trace of rain was recorded.

Drought or near-drought conditions will persist for the next week too, apart from the odd stray shower in parts, and a little patchy light rain or drizzle at times in the Northwest due to weak fronts brushing the high pressure area. Overall though most places will continue dry.

The heatwave has brought record June temperatures, temperatures exceeded 30 degrees on several days in the past week with 32 degrees reached in Shannon last Thursday.

Overall in the past week temperatures have averaged out between around 3.5 and nearly 6 degrees above normal.

It was closer to normal, though still above, in East Ulster and northeast Leinster. Cooler and fresher air will move into the North and northwest tomorrow but warmer weather will return countrywide by the weekend. For the coming 7 days, mean air temperatures are expected to average out around 3 or 4 degrees above normal in many areas, (warmest in the midlands and south) with temperatures a little closer to normal in some coastal areas.

Sunshine figures for the past 7 days were over 84 hours right throughout the country. The actual highest figure was at Dublin Airport where 106.6 hours were recorded. This is more than 2.5 times the average sun at this time of year. Good sunshine is expected in the week ahead also, but not as much as last week and it could well be rather cloudy at times in parts of the North and northwest especially.

Due to intense drying there is a red level Forest fire warning in operation.

Currently no difficulties for spraying, but caution is required due to leaf scorch in these high temperatures.

The land is very solid right now. Soil moisture deficits are 70 to almost 90 mm across Munster, Leinster and east Ulster; 40 to 55 mm in Connacht and west Ulster. Grass growth is practically non-existent.